At first sight, there seems little out of the ordinary on this wet afternoon for the pupils of Oyama primary school.

They wave from classroom windows as they rush to finish the day's cleaning chores. Outside, the wind and rain sends the school's pet rabbits into a retreat deep inside their hutches.

But buried beneath the surface of the school playing field is evidence that life in this village, about 40 miles from the Fukushima No 1 nuclear power plant, is far from normal: a large quantity of radioactive soil, wrapped in tarpaulin.

Health concerns for the school's 225 pupils, aged six to 12, centre on the radioactive isotopes released by the plant, whose operator has been criticised for failing to prepare for the 11 March tsunami.

In a preliminary report released on Wednesday, inspectors from the International Atomic Energy Agency said Tokyo Electric Power (Tepco) had underestimated the risk of the tsunami, although they praised the plant workers' post-disaster response.

"The tsunami hazard for several sites was underestimated," the report said.

"Nuclear plant designers and operators should appropriately evaluate and provide protection against the risks of all natural hazards."

The inspectors urged authorities to closely monitor the health of plant workers and members of the public, including thousands of children.

In April, Japan's government caused anger when it raised the upper limit of safe radiation exposure for children from 1 millisievert a year to 20mSv a year, the same level the International Commission on Radiological Protection recommends for nuclear plant workers.

The decision prompted Toshiso Kosako, a Tokyo university professor, to tearfully announce his resignation as a government nuclear adviser, describing the revised upper limit as "intolerable".

Ignoring official assurances that the exposure limit and current radiation readings in the area posed no threat to children's health, parents and teachers in Otama and five other communities in Fukushima prefecture started removing and burying topsoil from school playgrounds. At schools where mechanical diggers were hard to come by, parents shovelled the soil themselves.

The cleanup drew a dismissive response from Yukio Edano, the government's chief spokesman.

"Based on guidelines by the education and science ministries, there is no need for [soil] removal," he said.

But Oyama's principal, Hiroyuki Ando, said parental pressure, and the fear of the possible effects of long-term exposure to contaminants in the soil, had left him with no choice.

"We were worried about high radiation levels, particularly caesium in topsoil, so we consulted scientists and the local education authorities and removed the soil ourselves," he said.

The steps produced immediate results: radiation readings in topsoil outside Ando's school dropped from 1.32 microsieverts to 0.25 microsieverts an hour, compared with a pre-disaster reading of 0.04 microsieverts.

Under government rules, children should not play outdoors for more than an hour a day if radiation levels exceed 3.8 microsieverts an hour. "Even though the readings are better, they're still much higher than they were before the accident. I don't think we'll ever be able to get back to those days," said Ando, adding that pupils would have to take swimming lessons at a nearby sports centre this summer due to concern about possible contamination of the school's outdoor pool.

The education ministry conducted a partial volte face, announcing last week it would aim to reduce the exposure limit for children at school to the previous 1 mSv a year.

Officials promised to foot the bill for the removal of topsoil from outdoor play areas in the region where levels exceed the limit.

"We have taken the measure so children and their parents can feel relieved," the education minister, Yoshiaki Takaki, told reporters.

Many residents of Otama, where the school is located, feel anything but relieved. The Fukushima effect is being felt throughout this picturesque village of 8,600, where the rice – farmers have all but given up hope that nervous consumers will buy this year's crop – is considered among the best in Japan.

"We are not in the least bit reassured by what the government tells us," said Yuki Watabe, as she and her son arrived at the supermarket wearing surgical masks.

"I wear this when I go out, and wash fruit and vegetables thoroughly. I don't hang the laundry outside to dry and the children have to play indoors for the time being."

Others accuse their neighbours of over-reacting. "I don't think it was necessary to remove the soil," said Miwa Takeda, as she waited outside the school for her nine-year-old daughter.

"Radiation levels haven't exceeded the daily limit, so why bother? My husband worked at the Fukushima No 2 plant until the day after the tsunami and he hasn't bothered undergoing a radiation check. We eat the local vegetables and our kids play outside for as long as they like."

Ando says data showing that radiation levels are safe has done little to counter public unease about the future. "Most of the parents here were adamant that we did this, even though the government keeps saying there is no risk.

"You don't know what effects radiation will have 10 or 20 years down the line. It's not just about safety, but about reassuring people."

Schools throughout Fukushima prefecture are stepping up their response to the accident in the absence, they say, of satisfactory information from Tepco and the government.

On Wednesday, when most Japanese children changed into light summer uniforms, schools in Fukushima asked pupils to stay wrapped up in their winter clothes to reduce their exposure to atmospheric radiation.

Dosimeters to monitor radiation in pupils have been distributed to teachers at more than 1,600 kindergartens and schools in the prefecture. One school in Koriyama city, 37 miles from the nuclear plant, publishes regular radiation updates on its website, which receives 4,000 hits a day.

As they count the cost of the disaster in anxiety and possible damage to the local economy, Fukushima's infamy weighs heavy on the people whose home has become synonymous with radiation.

"To be mentioned in the same breath as Chernobyl is a source of great pain for us," Ando said.

"It is all very well the government telling us that we're over-reacting, but this is where we live. This is where our children go to school."

• This article was amended on 2 June 2011. The original spelled a village as Oyama. This has been corrected.